KASE is expected to see a relatively quiet trading session today

Our Comments and Expectations

External backdrop. The S&P 500 declined by another 1.6% yesterday, reaching its lowest level since May 5 and testing its 50-day moving average. As in previous sessions, the technology sector led the decline, with growing concerns about a potential market bubble. In addition, market participants are increasingly discussing a rotation of capital from stocks that have already rallied significantly into new offerings such as the upcoming IPOs of SpaceX, OpenAI, and Anthropic.

The widely anticipated U.S. inflation report showed that core consumer prices rose by 0.2% month-over-month in May, below market expectations. This somewhat eased concerns regarding further Federal Reserve rate hikes. Headline inflation increased by 0.5%, in line with the consensus forecast.

Another negative factor for the market was the deterioration of negotiations between the United States and Iran. Donald Trump pledged to launch another strike against Iran and criticized the country for delaying negotiations on a temporary peace agreement.

Oil prices rose by 2.6%, although they are moving lower again this morning. Oil has remained in a sideways trading range over the past two weeks. According to Bloomberg, conditions in the physical oil market do not support concerns about a growing supply deficit, as refineries continue to adjust their purchasing strategies.

In Europe, Germany’s DAX posted the largest decline, falling toward its 200-day moving average.

Market sentiment in Asia is mixed this morning. Hong Kong’s Hang Seng Index and the MSCI Emerging Markets Index are both down by around 1%.

China’s consumer inflation unexpectedly stopped accelerating in May, despite producer prices recording their fastest growth pace in nearly four years.

S&P 500 futures are currently up 0.4%.

KASE Index. While most heavyweight constituents of the index remain largely stagnant, Kaspi and Kazatomprom continue to act as key drivers of market weakness. However, judging by the performance of their GDRs during the previous session, today’s trading session may prove relatively calm.

Index constituents. Shares of Kaspi and Kazatomprom fell by another 3.3–3.9% yesterday. Nevertheless, both stocks gained 0.6% on international exchanges.

Kaspi ended its streak of nine consecutive losing sessions, during which the stock lost slightly more than 16% of its value. Based on the 4-hour chart, the shares have entered oversold territory and may be forming a bullish divergence.

Kazatomprom, meanwhile, is currently trading near important support levels.

At the close of yesterday’s trading across KASE, LSE, and Nasdaq, both stocks were trading approximately 2% higher on the local market than on foreign exchanges.

As noted above, today’s session has opened calmly. The largest price movement is seen in Kaspi shares, which are up 0.8%. Air Astana shares, on the other hand, are down by the same amount.

Currency. There have been no major changes in the currency market today. USD/KZT is trading slightly below KZT 488 per U.S. dollar and is periodically attempting to move toward the KZT 490 level.